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Source Reveals Oracle Plan To Expand Web-Based Programs

May 1, 2009

An undisclosed source revealed that Oracle Corp, the world’s No. 2 business software maker, plans to expand its small line of programs that companies access via the Web, Reuters reported.

Oracle is developing Internet-based programs to help businesses manage human resources functions such as employee recruitment, according to a source familiar with the matter who was not authorized to publicly discuss the plan.

The source claims Oracle is also expanding its line of customer relationship management software, or CRM programs, which companies use to manage sales and marketing activities.

Such programs, known in the tech industry as SaaS, or software as a service, are known competitors with ones from Salesforce.com Inc, the biggest provider of Web-based programs.

SaaS makes it quicker and easier for companies to start using the new software, and the service is becoming increasingly popular since its makers host the programs at their own data centers, saving customers the costs of running them on their own computers.

The person who described the strategy revealed that Oracle has briefed some industry analysts on its plans to expand its SaaS offerings, but it is still not clear when the products will be released.

An Oracle spokeswoman declined to comment on the speculation.

SaaS has received strong support from Oracle Chief Executive Larry Ellison, who said the company’s small SaaS division had turned its first profit last year.

He told investors that Oracle’s SaaS unit is one of its fastest-growing businesses.

Ellison is also the founder and majority owner of NetSuite Inc, a company that sells accounting programs to small and mid-sized businesses.

However, Oracle’s new Web-based human resources product could threaten sales of several smaller firms that have already gotten into the market, such as Kenexa Corp, SuccessFactors Inc, Taleo Corp and privately held Workday.

Oracle’s development plans first surfaced in a report from The Wall Street Journal.

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